Jumping Safely on Board the Social Networking Train
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- Peregrine Atkins
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1 Jumping Safely on Board the Social Networking Train Prepared by: Gary Sturisky, National Leader, Business Consulting, RSM McGladrey, Inc. Rob Kastenschmidt, National Leader, Risk Advisory Services, RSM McGladrey, Inc. Every revolutionary idea seems to evoke three stages of reaction. They may be summed up by the phrases: 1) It's completely impossible; 2) It's possible, but it's not worth doing; 3) I said it was a good idea all along. 1 Arthur C. Clarke The social media train left the station hours ago. In case your business isn t on board yet, you might want to reconsider, because more than 400 million Facebook users, 100 million professionals on LinkedIn and 175 million registered users on Twitter have proven to many that social networking is a business imperative. Make no mistake there may be bumps along the way. However, with proper planning it may be possible to take advantage of the new media s strengths and mitigate the risks that your company will end up in the headlines. For a typical business, key social networking questions are: 1. How can social networking add value to the business? 2. What resources are needed to mount an effective social networking effort? 3. Are there any regulatory restrictions surrounding its use? 4. How can we mitigate the risks of social networking? Companies need to engage in thoughtful analysis and discussion of those issues before they make their social networking decisions. 1
2 Converting users into relationships With easy and inexpensive access to millions of social networking users, it s not surprising businesses are flocking to participate in the social networking revolution. In its 2011 B2B Marketing Benchmarking Report, Marketing Sherpa reported survey responses of some 935 business-to-business marketers. When asked about budget for 2011, 69 percent of respondents said they planned to increase their investment in social media, 27 percent said it would remain the same and only 4 percent anticipated a reduction in the budget (See Figure 1 below). The emphasis on inbound marketing tactics is no surprise in an economic climate that demands companies monitor their spending closely. Figure 1 Source: MarketingSherpa B2B Marketing Benchmark Survey, Methodology: Fielded Aug 2010, N=935, Summary_ pdf. To turn social networking from an activity into a value-add requires a clear marketing strategy, based on the organization s business objectives. The structure is already 3
3 there. Social media users typically create profiles and build groups of contacts and friends within the network or by inviting others outside the network to join. A coherent plan is needed, however, to turn some of these millions of social networkers from prospects to leads to actual customers. Establishing an organization s profile page is the easy part. Like any relationship, it s strengthening the bond that s most difficult. Some popular social networking relationship-building marketing strategies include: Contests Promotions Customer service Employment practices Branded material Blogs One example of social media s power and cost-effectiveness is illustrated by a recent marketing effort by networking giant, Cisco. Cisco won Light Reading s 2010 Leading Lights Award for Best Marketing by using social media and shaving approximately $100,000 off typical product launch costs. Campaign statistics included: Cisco Social Media Stats Website: Blogs: 22 external, 475,000 views/quarter Twitter: 108 Cisco feeds with 2 million followers Facebook: 79 groups with 100,000 fans YouTube: 300+ channels, 2,000+ videos, 4 million views Second Life: 150,000 visitors, 50+ events Flickr: 300+ photos, 400,000 views Social Media Launch Highlights: 9,000 people attended the social media product launch event 90 times more attendees than in the past Saved 42,000 gallons of gas Nearly three times as many press articles as with traditional outreach methods More than 1,000 blog posts and 40 million online impressions A Leading Lights Award for Best Marketing 4
4 According to a survey of 1,000 organizational decision-makers in 17 countries, employee use of social media is one of the main sources of enterprise security risk: 33 percent of respondents restrict employee access to social media tools 25 percent monitor use, and 13 percent block these tools entirely. 3 One-sixth the cost of a traditional launch 2 Well-publicized risks Understandably, some companies have avoided social media because of its risks. The reality is, regardless of whether companies are active social networking participants or if they have formal, written policies and procedures, their employees are probably friending and tweeting from their work computers. And so, during working hours, are their competitors and customers. Bad things can happen. Some obvious social networking risks include: Reduced productivity as employees periodically check their social networking page during the day Lower morale as workers tire of seeing their coworkers waste time with no negative repercussions from managers Mistakenly leaked confidential information by unthinking employees Damage to the organization s brand through the bad social networking acts of its employees One of the most famous social networking cases involves Domino s Pizza employees who decided to make a video of themselves tampering with their employer s product and then posted the video on YouTube. According to one report, the company s rating with its customers fell no matter how unfairly. The company was forced to mount a counter campaign to restore its good name. In Georgia, a teacher who posted vacation photos of herself holding glasses of alcohol is suing her former school district. She claims that she was forced to step down and wasn t informed of her right to a hearing when questioned about her private Facebook page containing the photos. 3 Regardless of the merits of these cases, the risks to both employees and employers are obvious. Regulators in certain industries have also recently come down hard on social networking practices. An April 12, 2011, Reuters story reported that 15 months ago, the Financial Industry Regulatory Authority (FINRA), the largest independent regulator for all securities firms doing business in the United States, released highly restrictive social networking guidelines. Undoubtedly aimed at preventing identity 2 Social Media Examiner, August 30, 2010, by Casey Hibbard, 3 Social Media at Work: Worth The Risk?, Worth-The-Risk / 5
5 theft and other scams, the article states that the guidelines have frustrated financial advisors and prevented them from engaging in interactive social media practices that are most appealing to brokerage firms seeking to grow client relationships. Although FINRA has recently reconvened its social media task force, the article warned advisors shouldn t expect radical changes to current policies. 4 Mitigating the risks Social networking is a force to be reckoned with and seems here to stay at least for now. But how can its risks be mitigated? First, social networking security issues must be incorporated into enterprise information security policies and users must be educated by their employers so it s clear to them what is and is not acceptable. The IT organization can also make sure Web URL filtering technology is available to enforce the organization s written social networking policies and procedures and protect the network from viruses and other security issues. This technology should also be made available to users who work remotely or on mobile devices. Additionally, whether or not the organization is an active social media marketer, it must have formal, written social networking policies, covering not only behavior during working hours but activities outside the scope of their employees jobs. Those policies should cover: A disclaimer notice for personal websites Restrictions regarding content Discussion of what is and is not considered confidential information Discussion of what types of work-related discussions are and are not appropriate Social media s undervalued role Most discussions about the value of social media revolve around its possible return on investment, which makes perfect sense from a business standpoint. What s not mentioned as frequently is the power of social media to avert a crisis by countering bad PR that could have a significant negative impact on the bottom line. Companies that monitor social media sites and are educated on how to respond may, in fact, be able to put out a public relations firestorm early, before too much damage is done. And that ROI is hard to calculate. 4 Brokerage firms chafe at social networking limits, 6
6 It s not too late to jump safely on board Whether social networking makes sense as a marketing strategy or not, companies cannot afford to simply ignore it. The stakes for the organization are too high. At a minimum, employees must be informed about their social media boundaries through formal, written social networking policies and procedures, and the proper technology should be in place to protect the organization s valuable network infrastructure. Who knows, after careful evaluation and some preparation, management executives may even change their minds about social networking from it s completely impossible to I said it was a good idea all along. 7
7 McGladrey is the brand under which RSM McGladrey, Inc. and McGladrey & Pullen, LLP serve clients business needs. Together, they rank as the fifth largest U.S. provider of assurance, tax and consulting services with 7,000 professionals and associates in nearly 90 offices. The two firms operate as separate legal entities in an alternative practice structure. McGladrey & Pullen is a licensed CPA firm that provides assurance services. RSM McGladrey is a leading professional services firm providing tax and consulting services. Both firms are members of RSM International, the sixth largest global network of independent accounting, tax and consulting firms. RSM McGladrey, Inc. and McGladrey & Pullen, LLP are members of RSM International ( RSMI ). RSM International is the sixth largest network of independent accounting, tax and consulting firms worldwide, with 736 offices in 76 countries, and more than 32,000 people. The member firms of RSMI collaborate to provide services to global clients, but are separate and distinct legal entities which cannot obligate each other. Each member firm is responsible only for its own acts and omissions, and not those of any other party RSM McGladrey, Inc. All Rights Reserved.
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